Operator
Ladies and gentlemen, good day and welcome to the Astra Microwave Products Limited Q2FI27 Earnings Conference Call. As a reminder, all partisan lines will be in the listen-only mode, and there will be an opportunity for you to ask questions after the presentation concludes. Should we have a session during the conference call, please signal an operator by pressing star and then zero on your touch-tone phone. This conference call may contain forward-looking statements about the company, which are based on the business, opinions, and expectations of the company as and date of this call. These statements are not the guarantee of future performance and involve risks and uncertainties that are difficult to predict. I now hand the conference over to Dr. M. V. Reddy, Managing Director. Thank you, and over to you.
Good afternoon, everyone. A warm welcome to all participants joining this post-resulting call of Astra Microwave Products Limited. I'm joined with my colleague, Mr. Atim Kobra, Director of Strategy and Business Development, and Mr. Dees Vinivas Rao. This is my first earning call as a Managing Director, having taken charge on 1st October 2026. Before I begin, I would like to thank Mr. S.P. Reddy, who has led this company for years and is now taking forward our space business through Astraspace Technologies Ltd., the de-merger entity. As informed, the de-merger is aimed at creating two focused business, each with its own direction and growth plans. The space metallurgy and hydrology business will now have the opportunity to grow independently. with their own business priorities and capital allocation. Meanwhile, Astra Microwell products will continue to focus on its core defense and aerospace business, including radar, electronic warfare, telemetry, and internal security products and solutions. We believe this structure will help both business focus better on their respective opportunities and allow shareholders to see the value of each business more clearly. On defense and aerospace industry front, recent Defense Acquisition Council approvals strongly reinforce the breadth of multi-year opportunities across air defense, counter-troned systems, missiles, naval platforms, electronic warfare, and unmanned systems. Furthermore, government reforms such as updated defense procurement manual, DPM, they dropped a defense acquisition procedure introducing up to 60% local content mandates. And the year marking of 75% of capital acquisition budgets for domestic industry
provide long-term structural clarity.
Coupled with national targets aiming at 3 lakh crores in annual defense production and 50,000 crores in defense exports by 2029, this industry is positioned for sustained structural expansion. Moving to our consolidated financial performance, I am pleased to share that we have delivered a strong operational financial performance during this quarter, and H-127 has been a strong first half of the for Astra, with revenue of 437 crores, EBTA of 120 crores at a margin of 27.4%, and PAT of 57 crores at a margin of 13%. Our EFTA and PAT are the highest of yearly numbers we have ever reported,
both in absolute terms as well as margins.
This performance was driven by a favorable product mix, led by exhibition of domestic defense production orders, along with better control of operating expenses. On the order book front, A key highlight during this period was securing a landmark order for the Uttam AAAU valued at 1844 crore order from HIA. Alongside critical orders, we booked for RSF systems and antenna units from DPSs like BEN and also ISRO. As of 30 September 26, our standalone order book stood at 3937 crores. While our consolidated order book stood at 4708 crores, including service orders of 251 crores, which are typically more accurate due to margins. Our standalone order book has the largest share of production orders, followed by development, AMC and export orders. The incremental order inflows during Q2FI27 stood at 2036 crores, largely driven by defense orders. This includes 1967 crores from radars, 36 crores from electronic warfare, 17 crores from telemetry, and 16 crores from space. We have a clear visibility to book 1200 crores more worth of orders in FI-27, in which we have concluded 600 crores orders and expecting those orders. The production orders, particularly in indigenous radar and electronic warfare platforms, provide strong revenue visibility with healthy profitability. These programs typically have multi-year execution cycles and follow-on requirements, while repeat orders in software-defined radios through our JVC further strengthen our order pipeline. On exports and technology development, we continue to see opportunities in English market.
Supported by products and solutions developed over the years.
We have received good leads from a few international customers and discussions are on for design and development of prototypes. While customer qualification and order conversion can take time, these engagements provide a foundation for expanding our international presence. At the component level, we are also seeing interest in our MMIC portfolio with inquiries and leads emerging from markets such as in US and Europe. which probably translate into the business in the next couple of years. In parallel, we are working towards developing more comprehensive and integrated solutions as international customers increasingly look for a broad range of capabilities rather than individual radar systems. Our approach is to first establish and demonstrate these solutions in the Indian market before taking them to international customers. On the execution and operational priorities, our experienced workforce, engineering talent, and strong institutional knowledge remain important competitive advantages. Over the years, we have built strong R&D base, process stabilization, agile engineering, parallel testing infrastructure, and closer coordination with the vendors and inspection agencies. I would particularly like to highlight a major technological milestone achieved during this quarter. We successfully realized counter drone radar and delivered to DRDO for the final integration and trials. This achievement underscores our engineering capabilities and commitment to the indigenous defense manufacturing. As stated earlier, we have proactively taken up design and development of small and medium-range surveillance and tracking radars, next-generation RF seekers, wideband germers, ammunition electronics, technology-enhanced DWR, etc. Many of them are in advanced stage of completion and expected to go to the field trials from the next quarter onwards. Our JV company, AIC Limited, has a bright prospect to grow in strategic and tactical communication This is the communication segment. And bagged a worth of 413 crores orders and booked the sales of 334 crores in the first half of the year. With the order book of 913 crores and more than 500 crores orders in pipeline expected in the next two quarters, we are confident of meeting the revenue guidance given in the beginning of the year, that is 600 crores plus. For the joint venture company. With this order book, we are hopeful to reach a consolidate order book of approximately 5,500 to 5,600 crores in FI28. Going forward, we will continue to invest in R&D and production capabilities while maintaining a disciplined approach towards program selection, working capital management, and production planning. I'll focus on the mail. And strengthening our position in India's defense and aerospace ecosystem through indigenous product development, deeper technological capabilities, and expansion into new opportunities. With this, we remain confident of achieving our long-term targets and deliver sustainable growth and healthy profitability. I now hand over to Mr. Rathim Kabra, Director of Strategy and Business Development, who will provide more insight into the business outlook for the near and long term, and the strategists are up to take the company to the next level of growth cycle. I'll be happy to take your questions after his opening remarks. Over to you, Mr. Rathim.
Thanks, Anbhya, and good afternoon, everybody, and thank you for being here. I miss my colleague. Is he ready? Who has taken up the responsibilities to create ASTL full-time. Before I start, you know, one of our directors actually asked us to look at the guidance we have given versus what has been our track record. And then when we looked at it, we found that in FY25, we had guided at a PVT of 17 to 18%. We achieved 18.5%. In third quarter, FI-25, we guided for a top line of 1,000 to 1,100 crores for FI-25. We achieved 1051. Fourth quarter, we guided a PBT of 18% for FI-26. We got 21.8. Second quarter, FI-26, we guided gross margins between 45 to 50%. We got 51. And third quarter, FI-26. We guided 11.50 crores plus for top line and we got 11.63. So we have a fairly decent track record in terms of guidance. So we have guided, for FY27, we are guiding a top-line growth of 15% approximately. So somewhere between 1,300 to 1,350 is our targeted number. We are guiding for an EBITDA margin, a steady-state EBITDA margin, somewhere between 26% to 28%, where we hope to stabilize. And we are guiding to a path towards 2,000 crores in turnover. In FY29, plus minus 100, and to 3,000 crores in a few years thereafter. Back, and I'll explain how we are reaching there. Our target is to be near debt-free in the next one year, one and a half years. And as Envy said, with order books nearing close to 5,500 crores plus, and with a little bit of luck crossing 6,000 crores, this is without QR SAM, the main QR SAM order, you know, we actually seem to be in a fairly good place. So, for more than three decades, Astra has been known as a company. That builds India's armed forces and scientific institutions need quietly, reliably, and to specifications. This morning, or today, basically, I want to share something new. First public look at the Astra Space Technologies Limited, ASDM, and the plan that will carry it to the next four years or so. Let me start with what the de-merger means for us as shareholders. When the scheme is complete, every Astra shareholder will receive shares in ASTL. One ASTL share for every Astra share you put. We are not asking anyone to pay anything for them. So no new shareholder comes in between. Your stake in ASTL will mirror your stake in Astra exactly. You will simply own, directly and separately, a listed high-tech space and weather company that has been incubating within Astra for years. This is a thought I would like to leave with you. Most investors who want a stake in the space economy will have to find it, price it, and then pay for it. Astra shareholders already own it. And why does this matter? It matters because space economy is entering the fastest decade in its history. Global space economy is estimated to be worth around $650 to $700 billion today, and there's a very famous McKinsey report which talks about reaching $1.8 trillion by 2035. The clearest signal of where we are headed is Starlink. In under five years, it has grown to roughly 12 million subscribers, served by a constellation of nearly 10,000 satellites. And here is what matters for us. Constellations of this scale are never built just once. Forget the hundreds of thousands of satellites with Starlink. Blue Origin, the European consortium want to put in space, but satellites are replaced every five years or so, and each one of them needs payload electronics, RF subsystems, and ground infrastructure. This is a permanent compounding demand for exactly what Astra makes. India is now opening this market to private sector. The government aims to grow Indian space economy, I believe, from about $8 billion to $44 billion by 2033. And that includes a hefty number for exports. Defense surveillance constellations alone and visage more than 50 satellites, around half of them being built by the private industry. You would have noticed how markets value companies in this sector, here and abroad. Growth businesses on what they will become, not on what they will earn today. But with a word of caution, global supply chains need price effectiveness. It's a function of scale which India doesn't have at this point in time. It will take some time, but I'm sure we will get there with due focus. So you will find that most of the companies earning these valuations are young. Some have a prototype, a first launch, some have a business plan, but ASTL has something which nobody else can buy. Time. For nearly two decades, ASTRA has held ISRO certifications, designing, building, and delivering space-qualified hardware for its missions. We are happy to state that we supply an estimated 30 to 40% of the hardware in ISRO's remote sensing payloads. And nearly 25% to 35% in the communication payloads. Our clean rooms, test facilities, and qualification processes have been audited, used, and proven on real missions. That tested infrastructure is what lets the sector scale quickly and safely. And in our case, it is already built. ASPL works across almost the entire space value chain. We are not in the launch business, but barring that components, space-grade subsystems, assembly integration testing, ground stations, bus, satellite bus design, satellite assembly, and increasingly space data and analytics. The only link we deliberately leave to the partners is launch. But the interesting part is that this is a business which is up and coming with huge potential. We also have, as the other half of ASTL, a weather business. And our legacy there runs just as deep. Astra was among the first Indian private companies to build and design Doppler weather radars. Our radars, wind profilers, automatic weather stations. You know, in excess of 1,700, now sit inside the networks of IMD, and short-term forecasting and long-range forecasting, we play a very critical part. We are also looking at developing the RIRAR software and moving towards, eventually, AI-driven forecasting offered as a service. That's our long-term goal. Put the two together, and you have something very rare. Observation from space above, radars and sensors on the ground, sensors in the atmosphere, lower atmosphere, higher atmosphere, and everything fused into one platform for better forecasts for agriculture, disaster management, and aviation. It also gives us, at ASTF, a diversified revenue base across two high-growth sectors, so we are not dependent on either one sector alone. The numbers are beginning to reflect this. We hold an order book of around 900 crores in this business and a weather inquiry pipeline of around 2,000 crores. Our plan in likely case, touch wood, okay, is about 2,250 to 2,500 crores of cumulative revenue. Over the next four years, with annual revenue, I would expect it to reach around 800 to 900 crores by FI 31, based on our current visibility. And incidentally, this does not include anything from the global supply chains that I had mentioned earlier. So what are we looking at? There is a global opportunity. Demand for space grid components and subsystems is now running ahead of what the Western FATLAI chain can deliver. We hope that the world's largest players are looking for partners who are qualified and experienced and with scale will become cost competitive. Very few companies anywhere can offer nearly two decades of ISRO certified heritage in space grid hardware. And fewer still are in India. But our approach, like in the defense business, is collaborative. And it runs in both directions. Outwards, we want to supply subsystems into global supply chains eventually. And we also want to treat these partners as sales channels into markets which we cannot reach alone. Inwards, we want to bring the latest tech into India so we can leapfrog into the global supply chain rather than climb into it one rung at a time. Few conversations with global players are already underway, and we'll talk about that as something tangible materializes. So that's the overview of the space business. Now, turning back to Esther Microwave itself, I think, and then we very clearly brought out, our defense business is in the strongest position in our limited history. We will reiterate that we see an order base of roughly 8 to 10,000 crores building over the coming years. And a substantial part of that is already in hand, as we had described. Just as important is what we are now selling. I promise you that by Diwali, Astra will have three products of our own. We have kept the promise. We have a complete counter drone system. We have a, and the backbone for that is our default radar. We have an ASTRA-designed, ASTRA-branded bird detection radar, and we have a low-level, lightweight radar with a range of about 40 to 50 kilometers, of which 25 kilometers plus is already demonstrated. We are also developing, I must share with you, a very high-potential global product, which is in the New Age electronic mines. But we'll talk about that as something which will happen before the end of the year. So each of these reflects a very deliberate shift. We have had always an unusual breadth. Our R&D spanned a wide horizontal range of RF, Microwave, and Radar tech. We are now turning that breadth into our own branded IP-owned radars with in-house digital signal processing and radar data processing. Where our portfolio has gaps, we are filling them one product at a time. And that changes what kind of a company Astra is. We are moving, as we have spoken now multiple times, from building subsystems for others to owning complete systems and the IP inside them. And that's very valuable. So let's bring this all together. If you are holding one Astra share today, you are in effect an owner of three distinct businesses. Let that sink in. You're actually holding three distinct businesses. The first is ASTL's standalone defense business with a visible order base, a growing family of our own IP-owned products, and a long runway of execution ahead. The second is ASCL, which is a space and weather company with nearly two decades of ISRO-certified heritage, a full-track position in two high-growth sectors. And a five-year plan, four-year plan that roughly triples its revenues. Through the demerger, it comes to you directly at no additional cost. The third is our 50% ownership of ERC, our joint venture with Rafal of Israel. And we had just supported the stable revenue base, and we expected to close with somewhere around 600 to 700 crore region in revenues this year. And it gives Astra access to some of the most advanced defense technologies anywhere. Each of these businesses has its own group story, and each deserves to be measured against its own peers. Investors who take the time to look at Astra one business at a time, they find that the whole adds up to rather more than it is sometimes given credit for. But what ties all these things together is the way this management team thinks, a clear orientation towards growth, the R&D breadth to deliver it, and the discipline to fill the gaps in our portfolio ourselves rather than wait for others to fill them. We are extremely proud of what ASFA has built because we are on the path towards self-reliance. We don't... You know, okay, we should not, rather than take core products from outside and then put in the boxes and call it an India-made product, we want to own the IP and the tech inside there. And we are very excited by the fact that we are doing this for the country, and it fills us with pride. We are very excited about what Astra has built, and even more excited about what comes next. Which we shall be building along with you. So, we'll take the questions, and thank you for that.
Operator
Thank you. We will now begin the question-answer session. Anyone who wishes to ask a question may press star and 1 on your touch-tone telephone. If you wish to remove yourself from the question queue, you may press star and 2. Artists are requested to use handsets while asking a question. Ladies and gentlemen, we'll wait for a moment while the question queue assembles. We have the first question line of Amit Dixit from Goldman Sachs. Please go ahead.
Yeah, hi. Good afternoon, everyone, and thanks for the opportunity. First of all, congratulations for a great set of numbers and very healthy margins. A couple of questions from my side. The first one is essentially on the three products and congratulations for delivering them by Diwali. I just wanted to understand the market potential for these, I mean, our products, let us say, in the next three to five years. And there has been an AON for, like, low-level radars, so are we going to participate in this? Also, are we going to participate in counter-doll systems that keep on, you know, appearing? So I just wanted to get the opportunity size, as you see it now, for our products, these three products, actually. And when you expect their full potential to be materialized, subject to, of course, the amount of orders.
Yeah, yeah. Hi, Amit. See, the products, what we mentioned, three products. One is the bore detection radar, and the other one is the low-level light-weight radar, and the counter-roomed radar. The bore detection radar, yes, it is ready, and the demonstration is going on, and the market size is just we have started participating in RFPs. The first RFP we have submitted the bid, and we are expecting more inquiries from the domestic and as well as the export market. Overall business, we expect roughly around, you know, this particular radar close to around 200 to 300 crores in the next two to three years. And coming to the triple LR, the low-level light-weight radar, this particular radar is being developed against the requirement, the QR being given by, you know, army and these things. So we have developed this, and we will be ready. Yes, we are going to participate in the demonstrations in forthcoming tenders. And this potential, for this particular product, we have visibility of, you know, at least close to around, you know, 1,000 crores in next five years time frame. As this has a lot of applications to serve in the Indian defense market. The other one is counter-drone. Yes, we have made the complete solution ready, and we have demonstrated to the customers. And the radar, as we mentioned earlier, we took DOT from DRDO, and we have optimized that to suit to the... You know, the customer requirement in specific and also to make it more competitive. So that way we started building this radar. Now we participated a few inquiries and all those inquiries probably, you know, will get translated into business. Of course, again, they're all competitive bits. We are hopeful that at least we'll get minimum 30% of the overall market what it is opened up. So I think the potential is huge for this. As we know, I think we projected somewhere around 3,000 to 5,000 crores in the next five years' time frame. So this is what the market it is. But the technology keeps changing, so we are also working towards that, and right now we are offering only with the soft-kill solution, that is with the Jamar, but also we are working for hard-kill in years to come. So this is what our overall strategy for these three products.
Just a, you know, a sub-part to it. This counter-grain system, you know, a lot of people have developed there, the software system. How do we differentiate our products? Is it in terms of the frequency bands or something else? Or the number of birds you can detect at one time?
Let me answer this. Guys, there are a few things here. First, We are amongst very few guys who have our own complete independent radar, number one. This becomes a very crucial differentiation when you look at hard kill options. You know, drone technology itself is changing very, very fast. You have drones which are now fiber-guided. There are drones which switch off their RF comms, okay? So the radar becomes extremely crucial in tracking the incoming. and aligning your hard kill options in case the soft kill options fail. So, we have got Remote weapon firing systems, which we are integrating in our radar. We have got several platforms with mounted guns, which are being integrated with the radars. And we have kamikaze drones, which also will be integrated with this. So this is a fairly comprehensive solution. But I think on the soft skill part also, it matters a lot because there are The drones which cause damage, real damage will not be on advertised standard frequencies. So you need to have that ability to not only detect best of class so that you have adequate response time, but also identify frequencies which are non-standard frequencies. I must share with you that Astra has the product which can capture within the specified band any frequency and then try and negate that. I think as a comprehensive solution combining both these things, we can compete with probably the best right now.
No, that's great. Thanks for the elaborate answer. The second question, essentially, was on working capital.
If I look at cash flows of operations that have been impacted, in part, by inventory build-up. So, just wanted to understand how this will look, you know, by the year end, or is it the inventory build-up that you are doing in preparation for the aggregation, possibly in a 520 year?
We have already specified, right, that we are going to be... 1,300 to 1,350 a year, and which implies that our next two quarters will actually have a lot of deliveries to be made, which is the reason why inventory buildup is what you are seeing. Cash realization actually has been very nice at this point in time. So we are looking at not only... You know, a free cash flow generation, significant free cash flow generation. But we are also looking at our receivables as well as our inventory to be more or less in line with what the savings are. And that is our target in the next 18 months. So, which means the mission has to be happening, yeah?
Amit, adding to that, see, we have seen in the geopolitical situation, there are a few components which they have increased the lead time to deliver. So, what we did is, for the execution of even the first quarter of the next financial year, we started stockpiling those components so that even the quarter-wise, you know, we should not have any impact on those deliveries. That is the reason probably this inventory has slightly gone up as compared to the last year.
Okay, so if I compare, let us say, hypothetically, FY27 inventory, end-year inventory with FY26, end-year working capital cycle, I'm not talking about inventory here. So will cash conversion cycle go down from 3 to 3, 4 days that we reported, or will it be steady at the similar levels? Because our activity levels are also going up.
We are working towards to maintain around 360 to 370 days. This is what our target is to make it. Maybe in future, like as we go into these systems more, I think probably it may go further down. So right now our target is to bring it down to around 350 by the end of the year.
So that's very clear, sir. Wonderful, and thank you and all the best.
Operator
Thank you. We have the next question on the line of Pernatin from HSBC. Please go ahead.
Yeah, thank you very much. My first question is that when you mentioned the order book of 3,937 crores, this includes the orders in the space segment of 900 crores, right? So once the re-merger takes place, the Astra standalone order book will come down to 3,000 crores. Light for light.
Yeah, actually it is including space segment orders, but it is not 900 crores what you have mentioned. Space segment, you know, the order book is 220 crores as of date, and Yeah, yeah.
Let me clarify every other confusion here. We said 900 crores would be the expected year-end order carry-forward order book, right? Not the current book that we are speaking about.
Okay, so carry-forward as of March 27 end?
Okay, so the way we have to look at it is that when you're talking about 5,000 crore order book, the starting point is 3,700 crores for Astra X of space going to 5,000 crore or this 3,900 crore going to 5,000 crores?
So if we do, let's say 6,000, just for numbers sake, if we do 6,000 crores or 5,600 crores, whatever is the number you take, subtract from that 900 crores, which would be the kind of order book for space and order book.
Got it, got it. And second, just going back to the Uptam AAU radar delivery, given that we still don't have any line of sight of when HAL will start deliveries of the Mach 1s, when do you expect to start delivery of your orders for radars to HAL? What is the, as of now, the visibility that you have?
Yeah, actually, HAL wanted us to deliver four numbers by March 27, which, in fact, we mentioned in the beginning, in fact, while signing the contract, that, you know, we will try to make it, but two numbers we have committed to them, and four numbers, although we are trying to deliver, but definitely two numbers we would be delivering by March 27. But as As for the contract, we need to deliver 12 numbers by March 28. This is the first milestone of this particular contract, and we are gearing up towards it.
So just trying to understand that the first four obviously would be for, you know, HAL would be, you know, stocking it up in their inventory. Is there a risk that the March 28-12 numbers gets pushed out because HAL's own delivery schedule is now years behind what it originally was planned?
We don't think so. Oh, no. You'll have to ask HL, but we don't think so. We have a very clear-cut delivery schedule which has been given to us, and we are geared up for that.
So, just to clarify, last question is that you will be stocked, you know, ramping up your supply chain, building up inventories, keeping that in mind, that you have to supply of 12 numbers by Marshmati. Got it. Thank you very much, sir. Okay.
Operator
We have the next question of the line of Nitesh Rege from Chris Capital. Please go ahead.
Hello. Thank you for the opportunity to answer my question. Sorry to interrupt you, Nitesh.
Operator
Your audio is very low.
If you will come off the speakerphone and close it to the microphone.
Operator
It's still a bit low.
Just a minute. Is it better?
Operator
Yeah, this is much better.
So, my question is something in terms of scalability, right?
Sorry, I can't hear you, man. Hello.
I think his voice is too low, maybe.
Operator
Naseesh, you can go off the speaker, but that would help.
I'm on my handset. I'll just read the email.
Operator
All right, sure. We have the next question on the line of Abhijit Singh from Systematics. Please go ahead.
Thank you for the opportunity, sir, and very good. We're good to see some great results. The first question is on the counter-run system that we have built. Is there a player as part of the COD from GRDU in the counter-run product that we have? Yeah. Is there any other players got a TOT from DRDO for the same product?
Yeah, actually, in fact, the LA TOT was given to seven companies apart from Bell. But only as of today, apart from Bell, we are the only company making the product with the TOT from DRDO.
Right, so it is sort of that you are selected out of the seven companies, your product is kind of qualified for that.
No, no, no, no, the license was given to the seven companies, but, you know, whatever may be the reason, but other companies were not started, but we made it and we started to deliver.
We have demonstrated our counter-don't-radar and booked sales in that successfully out of the seven companies to whom the TRT was given.
Understood, sir. And, and sir, you mentioned that the potential for this counter drone is about 30 to 50 billion in the next four, five years. Is that correct?
Okay. The, I believe the entire counter drone space, the government of India itself has, there are indications and reports that they are talking about 30 to 50, 30,000 to 50,000 crores. Okay. So. Well, that's an estimate depending on when they have the money, what is procured and at what point in time. So that's, it's a global product, right? Okay. World are now being driven by drones, right? Okay. There's a huge civilian side of the business. There's a huge military side of the business. If there's a drone, there has to be a counter drone system, right? So it's a mega business. I'm scared to put a number onto that.
And lastly, on the margin front, I mean, this quarter we've reported, I think, all-time high gross and EBITDA margins. And in the next two years, as we all know that, you know, a lot of the fixed cost loading is largely behind us. We've done a lot of KPID. So we might expect some operating leverage paying out in the next two, three years. So in that light, what is our expectation? I mean, I know you've got it for 28, 26% margins. I mean, is there an upside risk in FY29 because the execution will pick up potentially from the data disorder?
So operating leverage, right? Okay. I don't think our fixed cost base will go up dramatically, right? So there is a huge, most of the business which comes in will flow both straight onto the bottom line. And, you know, it should be a disproportionate amount, right? But on operating margin front, we are comfortable guiding you to 26 to 28. If it becomes better, that's the upside, you know.
Thank you, sir. So thanks for answering my question. I'll get back in the queue.
Operator
Thank you. We have the next question, Ryan, of Nitesh Rege from Chris Capital. Please go ahead.
Hi, sir. Hope I'm audible. Yeah, thank you for the opportunity. Some of the questions mainly on the long-term scalability. So can Astra scale to, let's say, 10,000 crore sustainable recurring revenue through our existing radar and EW businesses, or will we need to expand into newer segments, such as, you know, electro-optics, missile seekers, and integrated defense systems?
We are actually participants in all these spaces that you talk about, right? But if... What is, you know, my favorite sentence on this is, what is now beyond line of sight? So, Radar and EW will play a very, very critical role going forward. What is now tech, right? And tech has a short shelf life. So, each and every company, by the way, it's not only Astra, each and every company operating in this space will get substantial business opportunities, provided we are able to. Create products and combine various technologies to create products which meet the needs of the battlefield. Yes, the answer is if you are reaching 3,000 pros, right, all these other initiatives that we are talking about. That gives us a window of opportunity to not only develop them, but to also develop on a global basis, by the way, the marketing alliances which need to be in place, the qualifications which need to be in place, the relationships which need to be in place for marketing these products on a global basis. So that's the whole plan. You know, let me give a number to you. And this is a number derived from Claude, by the way. When we feed in the features of our electronic mines, right? Okay. It's amongst the best in the electronic mines, which we are developing. India is developing, by the way. Okay. And I think that number itself comes in excess of $750 million annually. That's the current demand that we speak about. Okay. Bye. It pales into comparison what we have as a revenue base right now, you know. Each of these product lines that we are developing, right, be it the counter-zone systems, be it Kedars, be it electronic worker systems, be it electronic mines, you know, each one of them has substantial business opportunities going forward. How much we can capture, how much we can define, that's a, that only time can tell, right.
Okay, sir. And, you know, what additional capabilities do we think, you know, we need to develop, you know, to become like global defense electronic players, which like Albert or Hensholt and, you know, an extension of partnership JV's acquisition, something we're exploring to expand our time and exports.
I think it will take us time. I think it's an attitudinal shift which is required more than anything else in these kind of businesses, right? I think we are on the cusp of a multi-decadal opportunity. So your question needs to be answered in terms of the time frame that you're referring to, okay? One day, obviously, we will compete with the best in the world. Many companies from India will do that, okay? But in what time frame will we achieve it, right? There are gaps in our technology framework overall in the country, by the way. Uh, which needs to be filled. The timelines need to be accelerated. In fact, I was, we were listening to the podcast recently, yesterday, uh, talking about AMCA having been started in 2006 and seven, right guys. And the first prototype we're talking of is 2035, right? And he was being hammered on the question that why is it that it has taken so much of time to, uh, come up, uh, to what, where we are. today, right? So I think it's a, a new answer, it's an attitude. Right? Okay. What we expect and how we deliver. But I think as a private sector, I think we can tell you safely, we have limited concerns, right? And we have the best of breed guys who are working with us. I think people, you know, with talent, like, you know, an ability within the company and the leadership, I think we should be in a position to fill up the gaps which we have. And in a defined timeframe, get the output we want. I think we are limited by our ambition. Not only Astra, but a few other Indian companies, I can say, you know, it's a sector which is doing amazingly, poised to do amazingly well. How much we capitalize on it, that's a function of our ambition and our abilities. There's more clear answer to what you are saying. I wish I can give you a more definitive answer, you know, but.
No, sir. Thank you so much for answering my questions. I'll fall back in the queue if I have more questions.
Thank you. Envien, you want to add anything to this, please?
Yeah, actually, in fact, I mean, there is an ample opportunity for India. In fact, adding to the, you know, government policies of Atman Abel Bharat, as we have been seeing the indigenization in segment by segment, product by product, like now many of the censors have been indigenized. So there is a potential for Indian companies to grow. As Nishatim said, there is a technological gap in India. We need to fill it up. It takes some time for us to build the global products, but it's not too far away now. I think it's a matter of a year or two so that we can build those products and go to the international market.
Operator
Thank you. We have the next question, Ryan. Shiroam Kapoor from Jefferies. Please go ahead.
Hi, sir. Thanks for the opportunity and congrats on a great set of results. My first question is just coming back to your margins. You know, this quarter particularly, we saw very strong cross margins that you mentioned that you had a favorable product mix. You know, just looking at the numbers in terms of your overall defense contribution as well as, you know, contribution from products appears to be similar quarter on quarter, yet there's a, you know, significant cross margin improvement. So just to understand... You know, is this going to be volatile on a quarterly basis, or are we seeing, you know, is there sort of a steady state gross margin number you have in mind? And just to clarify on the EBITDA margin side, you said 26% to 28%. Is that just for FY27 or going ahead as well?
I think over the next two, three years, it's a comfortable assumption to make, right? But as you very rightly said, this time there were a lot of production orders. So, we were able to capture a higher EBITDA margin, but we are comfortable guiding in a state of 26% to 28% where we believe that we will be able to deliver without upsetting the Apple card.
Right. And just secondly, on your order flow, so last quarter, you know, you highlighted a few major orders that you're expecting as part of the overall 8,000 to 10,000 crore order base that you're looking to build. Which included, you know, around 700-800 crores from QRSAM, 500-700 crores from your JV partner, and another maybe 3,000 crores from, you know, the Sukhoi Thatti program. So just to understand on timelines for this, so QRSAM, you mentioned you're not, earlier you mentioned it could come by FY27 end, but are you seeing delays on that? When could this get pushed towards on the QRSAM order?
QRSAM, most of you guys all talked to Bell, but I'll have an immediate answer. Yeah.
No, actually, probably most all got anything from Bell, but anyway, Bell is hopeful of getting this contract by any time from December to March. I think they should be in a position to get this contract, and as and when get this contract, definitely, you know, we will have a contract in place in the next half to three months. But before that, yeah, Bell took advance action for FOPM, for which we have received orders, and those orders are in execution phase in this quarter and next quarter. There's Q3 and Q4. It's a small quantity for FOPM version of QSM. But for the main contract, as and when they get contract, I think within three to four months, we will have the contracts on place. So, in all possibilities, execution will start for QSM, I think, maybe in FI 28, call last quarter, or maybe in FI 29.
Right, and just on the, you know, the orders from the JV partner about 5,700 crores that you were expecting, is that expected to come this year itself or over the next two, three years, and similarly for the Su30 program, you know, when can we see some of those orders come in?
For JV Partners, actually, as we mentioned, as of now, they have an order book of 900 crores, and they are expecting another around 1,200 to 1,500 crores in the next 6 to 8 months time frame. And next, about a year or so, they have clear visibility for another 1,500 to 2,000 crores. So, all in all, they have a good order book visibility for next two to three years. And on the execution front, this year, they will be doing it around 600 crores, as we mentioned in the guidance. And next year, we're targeting around 1,000 crores, as far as the JVC is concerned. And your next question, I'll get you the next question.
we are in the, we are party to the DRDO programs. As you all know, we are in both radar as well as for the EWC. In both programs are going on well, as of now, and we have delivered the hardware for first prototype of radar of our AAAU to DRDO. The firmware and software integration is going on. And, uh, hopefully by next year, I think, uh, you know, DRD should be in a position to, uh, you know, commission this radar and all. So, from our side, we are, uh, on track as both the radar as well as the EWs would consider.
Let's answer this question. I think that's right. Calendar year 29. Calendar year 29 is when we should be looking at these orders.
Understood, sir. Thank you so much and all the best.
Operator
Thank you. We have the next question. I know, Sahil Kariya from White Pine Investment. Please go ahead.
Thank you for the opportunity. Sir, on the Uttam Radha order, on the previous call, we had guided that 12 units are to be supplied by September 27, and thereafter 25 units angrily, but now we have pushed that timeline to 12 numbers by March 28. So, is there a supply chain issue or an execution issue?
No, it was on base. Anyway, can you please share?
No, actually, that timeline, what we have mentioned is before signing the contract with the call, I think we mentioned. Now, as per the discussions with the customer, this is what the schedule being worked out, and this is what we are working towards, because there was a delay in signing the contract and placement of the order. So, based on the schedule, we worked out the revised.
Okay, so going forward, it could be 25 units annually or 12 units annually only?
Yeah, actually around 25 units initially to begin with in FI 29 and then thereafter we go to 33 to 34 units also.
Okay. And the second question is on the JV product, that is the SDR that we manufacture. So, like, I've been looking at the orders that we have reserved is usually called the airborne SDRs that we, like, the airborne orders for the airborne SDRs. And recently, we have participated for some SDR for the RE, which was given to Alpha Technologies 500 Limited. So, like, could you just give us some kind of, like, where do we, like, where are we behind in the ground-based SDRs or the SDRs for the Army?
Yeah, this particular radar is basically a MANPAC version in VHF band. This radar is being completely developed in our joint venture with the indigenous waveform design and all. It was successfully gone through all the trials except the last trial where we had some software bug issues and there were a few parameters we couldn't demonstrate within the time frame in the last trial. So that is how actually we missed that initial first phase of that particular, you know, the procurement. But however, subsequent to that, the user witnessed the test after we fixed those issues, and now we are ready with the total product. And we will be there in the next phase of procurement. Already discussions have begun for the second phase of procurement. We will be in the race.
So, sir, could you just give us the bifurcation, any color on, like, what is the address for the market for the airborne SDRs and for the manufactured SDRs that we are looking forward to?
The market size is huge. In fact, most of these FD are both in airborne as well as ground are all getting into the IDDM category. And this potential is, in fact, next to three years we have been seeing market of close to around 5,000 crores minimum for airborne segment. And for the ground segment also close to 3,000 crores will be there for next three years.
Okay. Thank you, sir. Thank you so much.
Operator
Thank you. We are the next question line of Manish Maheshwari from Equity at Work Office. Please go ahead.
Sir, just a follow-up question from the previous participant who had raised question on the working capital. You said that you are expecting a significant free cash flow generation. So, can you quantify that? What is the quantum of free cash flow that we, I mean, that we are going to generate or that we will be generating?
We, I think last year we did in excess of 300 crores. Correct. Somewhere between 250 to 350 should be the target, I guess.
This is something that we are going to accept with FY27, it will be with 3-wheel at first, right?
I'm saying somewhere between 250 to 350 crores should be there. It depends on, guys, it depends on, we cannot give the exact number at this point in time, right? That's a rear-view mirror number, but that's the range where we expect we should have, it should land.
Mr. Srinivas will give you more light on this year.
So you've seen, right, receivables is more or less 200 days is there. We are rigorously working towards the collection early, or else at first. We are expecting 150 to 300 crores in between operational surplus. In between, even, we are using a little bit for the capex also. Those are the high interest costs which we are using from the surplus. But more or less, by year end, we are expecting CC limits, working capital limits, going to be zero. That is our target area. We are working towards debt-free and the working capital.
And sir, with respect to, yeah, thank you, sir. The second question is with respect to order book. Our order book is about, on a consolidated rate of 5,000 closes, I mean, consolidated order book is what we are sitting on right now. Are there any slow moving order or something where the revenue recognition is taking some time or there is a delay at customer's end or something? Is there a specific order or maybe a few orders which are actually, I mean, where the execution is slow?
No, actually, as you know, the few contracts like Uttam, which has an execution cycle of four years. And similarly, there are few contracts which we have an execution cycle of two to three years. Based on their requirements, they have given us the execution timelines. Accordingly, we worked out the execution. Otherwise, there is nothing of that, you know, we are behind the schedule.
And then cash conversion cycle is also very, I mean, it's on the higher side, right? Cash conversion is 370 days. And we are attempting to sort of endeavoring to sort of, you know, bring it down to, to what number? They say 350 days.
We are wasted. We will try to bring it to 350 days.
See, we are telling optimistically. So even rigorously, we are working to bring down further also. But next six months, geopolitical issues or maybe some other issues is impacting us. Otherwise, we are going to be targeting 350 days.
Okay. All right, sir. Thank you so much.
Operator
Thank you. Ladies and gentlemen, that was the last question for the day. I now hand the conference over to Mr. Reddy for closing comments.
Thank you, Vijay. I conclude the call. If you have any further queries, please contact SEA, our Investor Relation Advisor. We sincerely appreciate your continued trust, support, and participation. Thank you, everyone, for joining us today on this evening call. Thank you.
Operator
Thank you. On behalf of Ashraf Microwave Products Limited, that concludes this conference. Thank you for joining us. Anyway, now disconnect your lines.
